(Bloomberg) – Telecoms company Fusion Connect Inc. has raised fresh money and reworked its debt as part of a turnaround strategy that will see Morgan Stanley Private Credit take ownership of the business.
The Atlanta-based company raised $55 million in preferred stock and refinanced a $60 million credit facility in a recapitalization led by Morgan Stanley, Ellington Management Group and Investcorp Credit Management BDC Inc., according to a statement seen by Bloomberg on Wednesday.
Fusion Connect will be majority-owned by Morgan Stanley after the transaction, which will reduce its leverage by 80%, according to the statement. All of its current stakeholders support the deal, the company said, and several members of the company’s management participated in the capital raise.
The recapitalization is the result of a private debt swap the company launched last month to address emerging debt issues after emerging from bankruptcy in January 2020. S&P Global Ratings said at the time that the company was at risk of run out of cash within six months if she hasn’t made the exchange.
Post-deal, Fusion Connect will have a debt load of approximately 1.7 times adjusted earnings on a twelve-month basis, according to the release.
The company, which provides cloud communications and network management, has spent the past 18 months investing in new products, strengthening its management team and improving customer service, chief executive Brian Crotty said in the release. .
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